Though something has clearly changed in US-EU-Russian relations due to the crisis in Ukraine, we are not in another Cold War. Nor are we in what many have defined for years as the “post-Cold War”, rather we are in an era that can be defined as the post-post Cold War.

While it is difficult to understand what is driving Vladimir Putin, there are tactical and strategic explanations behind his moves. On the tactical side we know that when former President Viktor Yanukovich was pushed out of Ukraine following the protests in Maidan Square and an effort by EU foreign ministers to negotiate an agreement with him, Putin perceived he had suffered a fundamental setback. He knew that any new government in Ukraine would be pro-Western and more anti-Russian and he therefore responded – as a face-saving and popular step at home - with the bold step of taking Crimea. This was a tactical move and he was extemporizing.

On the other end of the spectrum is the strategic explanation of what is driving Putin. He may have been gradually forming a different world view and self-perception as someone who is not bent on reconstructing the Soviet Union, but rather (in a way similar to Turkish Prime Minister Recep Tayyip Erdoğan who refers frequently to the Ottoman Empire), acting as he is a great Russian nationalist. Putin has borrowed the Eurasian ideology, this belief that Russia represents a different civilization with different values than the West and that his "Eurasian union" is this effort to create a new pole in international politics. Without Ukraine, however, that Eurasian union is incomplete and so is his grand strategy.

Thus, we are facing a mix of tactical and strategic motivations and this poses a real challenge to both Europe and the US. The reverse is also true : Western actions in recent years have been perceived as a threat to Russian interests. Indeed, the West has significantly expanded the Euro-American alliance system and in retrospect some may say that this process has gone too far. It could be argued that the West was not sensitive enough to perceive the growing Russian sense of vulnerability. But the fact of the matter is that when former US President George W. Bush proposed at the 20th Annual NATO Summit in Bucharest in 2008 that Georgia and Ukraine be brought into NATO, that did not happen. Germany, among others recognized the danger of such a move. Also one could argue that the EU Eastern Partnership policy was provocatively encroaching on what Putin considered as his sphere of influence.

In my opinion, however, it would be wrong to conclude that the West provoked this crisis or that it is now acting recklessly in adopting modest sanctions. In fact, President Barack Obama’s reset policy was clearly designed to try to return to a more constructive relationship with Russia. The problem is that the overtures that the Obama administration made were simply not responded to by the Russian side. Therefore, faced with the Ukraine crisis the US and Europe needed to respond and they needed to do so in a prudent way. So far that has been the case. No provocative military supplies have been sent into Ukraine. In fact, from the United States, the Ukrainian military has only received MREs (Meals Ready to Eat) and it has increased military exercises with countries like Poland and the Baltic states. In addition, only some modest sanctions have been agreed upon, so no provocative actions have been taken by Europe and the US and the two allies have indeed proven to be united in a cautious and incremental course of action.

Nevertheless, the tough job remains. Firstly, the IMF, the EU and the US must engage in a nation-building effort and work together to fix a broken country – Ukraine. That is not going to be an easy task, particularly given the volatilities and the differences within Ukraine itself. Putin has been famously quoted as saying that Ukraine is not a real country. The West’s task is to demonstrate, by working with the Ukrainians, that it is.

Secondly, if there is military escalation, as difficult as that would be for large Western companies with a significant stake in Russia, the US and Europe are going to have to take some tough decisions on broad-based sanctions. The worst possible thing that could be done after the Hague Declaration agreed to by the G7 governments in late March would demonstrate that sectoral sanctions are a bluff and not a reality.

That said, it is clear that the West does not want to go back to the Cold War past. The dilemma lies in whether that vision is shared by Putin. Since the early 1990s the West has wanted “a Europe that is whole, free and at peace” as stated frequently by former US President George H.W. Bush and his successors in the White House. However, if Putin insists on a traditional Russian (albeit not Soviet) policy that countries surrounding it get the choice of being either a victim or a vassal, that is inconsistent with the concept of a Europe that is whole, free and at peace. There was once a very prevalent view in both the US and Europe that the Russians would eventually integrate with the West, understanding the advantages inherent with such a long-term strategic choice. Now, we have to wonder about that. Given the current situation, the West must pursue a classic stick-and-carrot strategy : it must demonstrate the advantages of being a full member of the international community with good working relations with the West, and try to appeal to that growing population of younger, better-educated Russians who understand globalization - the Russians are today, after all, the world’s great tourists. This will take time as there is still, using Richard Nixon’s old term, a “silent majority” that is still wedded to the idea of Russia as a great power, and these are the people to whom Putin’s strategy is appealing. Therefore, the West must send clear messages on both the costs and the benefits of different Russian choices.

The US has gone through a difficult decade in foreign and security policy, due to the two exhausting conflicts in the greater Middle East - which some would simply call grave mistakes. There is weariness in the US and the government wants to re-define its priorities in foreign policy at a time when Americans want to focus on domestic issues. The Pivot to Asia was designed to help the US step away from the Middle East and focus on the central issue of the 21st century which is the emerging challenge of the next global power, China. The interesting thing about the Ukraine crisis in this context is that now the US is pivoting back to Europe. This tells us, among other things, that the US no longer has the luxury of establishing regional priorities. Whether we like it or not, we remain a global power.